The idea of an innovation system is that there is something systematic about it. My worry about Australia's innovation system is that its most systematic feature is its exclusion of the humanities, creative arts and social sciences (HASS).

The R&D tax concession specifically excludes research conducted within the social sciences, arts and humanities, on the grounds that it is not patentable and therefore cannot be commercialised and used in the market. We need to change an out-dated view of innovation based on the smokestack industries of the last century. It would require the government to revise the way allowable research is defined in the Income Tax Assessment Act at Section 73B 2C(f).

The Commonwealth department responsible for education, research and training should be called exactly that, rather than education, science and training. It should be DERT, not DEST. In its current inquiry into public support for science and innovation, the Productivity Commission, also specifically excludes the HASS sector. Its focus is on the physical and biological sciences, including engineering, "with the social sciences (and the arts and humanities) excluded except to the extent they are relevant to innovation". This merely continues the tradition, from the first major engagement in this country with innovation policy at the National Innovation Summit in early 2000, of equating research with science and development with the results of strictly scientific inquiry.

But it hasn't gone unnoticed. In a read-through of the 78 or so submissions to the Productivity Commission, searching for references to 'social sciences' or 'humanities,' I found fifteen submissions which made a substantial point about the exclusion of HASS from this study. And they were by no means all from the HASS sector. This is the view of Professor James Trevelyan, Mechatronics Discipline Chair at The University of Western Australia's School of Mechanical Engineering: 'We rely almost entirely on a cadre of technical specialists for industry research and development. These technical specialists have only an informal understanding of human behaviour and are trained to work entirely with explicit knowledge even though they depend on unwritten and tacit knowledge for the success of their research.'

On a broader level, the national debate on ideas and values is also out of kilter, with most attention being paid to the tendentious proposition that postmodernism has laid waste to the intellectual and educational fabric of the nation. At the most basic level, Australia is a socially cohesive nation, and our writers, teachers, artists, urban planners and enterprise and political leaders have contributed mightily to that. The majority of them have developed their careers engaging directly with the humanities, arts and social sciences. Perhaps more than most, those working in global business know the value to be placed on social cohesion at a time when civil strife and war rage across the globe.

But the HASS sector also has to put up. We in the humanities, arts and social sciences should light a candle rather than only curse the darkness. We haven't necessarily been good at rigorous measurement of the claimed contribution the sector makes to Australia's society and economy, preferring often to rely on case studies. But there are two useful pointers to a better evidence base for the claims of the HASS sector.

One is a substantial study tracking the extent and dynamics of collaboration between the science-technology-engineering-medicine and the HASS sector which the Council for Humanities, Arts and Social Sciences has done for the department of education. We in the HASS sector have taken the initiative in seeking to demonstrate that 'contrary to the policy settings' the 'two cultures' really are working together, on the ground, to address real problems as they present themselves.

The other is the emerging body of economics that has focused the innovation agenda on the services economy. Most traditional science and innovation policy risks excluding where most everyday innovation is occurring in the economy. The service sector is by far the bulk of the economy (75 per cent by GDP, 81 per cent by employment) with primary and manufacturing sector making up the remainder.

This where much of business 'focus on innovation lies' in finding new solutions and new processes to business models and operational challenges rather than waiting for the serendipitous benefits of laboratory science to trickle down, or out, to the real world.'